EVS - valuations, page-2

Thanks I agree with you.

here is an example of valuing high growth high margin SaaS type companies while adding in an extra bit of nuance.

Feel free to add to it.

I posted this on the PPH thread.

Essentially it is
price/(gross margin x recurring revenue x growth rate*), then divide that (column F) by my constant factor which is 25.
If you get a number in column g less than 1, broadly speaking its still cheap, and over 1 its expensive.

Also price should be fully diluted (but in this example I've just used market cap)

*where growth rate is expected over the next 12 months.

Obviously extra factors then need to be considered such as
Total addressable market
Cash in the bank/chance of dilution if not cash flow neutral
quality of management in terms of reaching forecasts
moat/winner takes most area etc


In the table I've used some crude numbers for gross margin where it might not have been reached yet i.e. Evs gross margin as per management is aimed at 85% on the ARR but because they also sell hardware with lower margins, its hard to confirm that this is achievable from current financial reports.
Also where I'm not sure of gross margin as I have't talked with management then I might just use an estimate.

Also feel free to change the expected growth rates.



so based on that table PPH is reasonably priced which given that they are now cash flow neutral would probably be a reasonable investment for me but not a screaming buy. Under 3 dollars I'd probably invest a little bit.

BID recently got to a G value of almost 8.

On the above I haven't placed any value on the hardware side of EVS.